While the process of selling a seller financed mortgage note or note and Deed of Trust is similar to selling residential real estate notes, there are a few differences. But either way, I’ll walk you through the process from quote to closing.

The process to sell an owner financed commercial note and deed of trust or mortgage (depends on the state whether the security for the commercial promissory note is a Deed of Trust or Mortgage). Sellers could also be selling a Land Contract but that’s a subject for another day and post.

People Sell Commercial Mortgage notes for many reasons. The most common is that they would rather receive a lump sum cash payment than increments of money over time. Perhaps their financial situation changed, maybe they cannot compete with low interest rates from banks, or maybe they have caught wind that the payer is financially unstable. Whatever the case, they are interested in selling the note and are looking for someone to purchase it.

A professional note buying company is one of the first places they approach. This organization Sell Commercial Mortgage note holder to purchase the note and it typically pays the closing costs involved in the transaction. Unlike the process of obtaining a mortgage, selling a note is quick and painless. When the seller knows what to expect, the deal progresses even more smoothly.

To sell the note, the holder must first gather some information. This includes the address, type, and acreage of the property. Date of sale, sales price, down payment, first or second mortgage amount, and payment details including the schedule, amount, interest rate, balance and first and most recent payment due should also be compiled. If a balloon payment is part of the financing, the balloon date should be on hand.

The first step is to call us for a quote. It takes about 5 to 10 minutes if you have the documents in front of you when you call. These documents are 1) The note, 2) the amortization schedule with the current balance, 3) The settlement or closing statement and 4) An estimated current value of the property.

The information we will want to know from this information include (in no particular order),

1) The sales price,

2) The down payment,

3) The date of the first payment,

4) The last payment made and current balance although we can calculate it if all payments have been made and no extra payments have been made,

5) Payment amount,

6) Amortization period and if there is a balloon payment, 6) The amount and date the balloon is due if there is one,

7) Interest rate,

8) The original note amount,

9) Have the payments been on time?

10) Is the property owner occupied,

11) Is the buyer an entity vs. an individual and if an entity, is the note personally guaranteed?

12) Your estimated value of the property.

13) Address of the property,

14) The credit worthiness of the buyer if you know,

15) How many payments remain, although we can calculate this,

16) Is there an underlying balance (only applicable with land contracts or contracts for deed), and

17) Is there an assignable lender’s title policy (will show up on the settlement statement).

Once you accept our quote, we will need copies of the note and security instrument (Deed of Trust, Mortgage, etc.) to send you our purchase agreement. Once signed, we will need

1) Proof of at least the last 12 payments,

2) A copy of the Title policy/title work. We then take it from there and if all goes well close in 10 business days or less.

We normally close by overnight courier and wire you your funds once the original note and security instrument is received. There you have it, the entire process of selling a note on a commercial property. If you are looking for tips to manage your note, check out our page on managing commercial owner financed notes. If you have any questions, give us a call 7 days a week at the number below.